James Packer’s entanglement with Israel’s elite, including a close personal relationship with Benjamin Netanyahu and the now Mossad chief, was considered a “national risk”, according to an Israeli report, quoting testimony from witnesses in Netanyahu’s corruption trial. The Australian casino mogul, 53, developed an obsession with the Jewish state over the past few years, once kissing the feet of the former president Shimon Peres when he came for a dinner, according to “a person who was close” to Peres. He also considering converting to Judaism, Haaretz newspaper reported. Alleged details of Packer’s years-long relationship with the country’s ruling class have emerged from a lengthy corruption trial against Netanyahu. Case 1,000, the so-called “gifts affair”, involves claims that the Israeli prime minister and his family received valuable presents from international billionaires, including expensive cigars and pink champagne. The Guardian was unable to corroborate the Haaretz report. Throughout the investigation and ensuing trial, details of testimony have regularly been leaked in the Israeli press. A spokesperson for Packer did not answer questions about the Haaretz report. Packer is not a suspect in the corruption case, but he bought a beachfront house next to the Netanyahu family and is alleged to have showered them with favours, including free holidays for the 71-year-old leader’s son, Yair, and jewellery for his wife, Sara. Netanyahu denies all the allegations and said any gifts were goodwill between friends. Haaretz wrote that the Australian became enamoured of Netanyahu, telling Israeli investigators that the country’s longest-serving leader was “the most impressive person I’ve met in my life”. He was also charmed by Yossi Cohen, who headed the national security council at the time and is now the head of Israel’s intelligence agency, the Mossad. Packer referred to Cohen as the “No 1 spy” or “James Bond”, according to testimony from the Hollywood producer and former Israeli intelligence operative Arnon Milchan, Haaretz said. Milchan, who has worked on films including Pretty Woman and Fight Club, is not facing charges but has become a key witness. He said in testimony he was concerned that Packer, who has said he has paranoia and has drunk alcohol to excess, became a “national risk”. Haaretz wrote how Netanyahu’s relationship with Packer was so close that the prime minister would use the Australian’s villa when Packer was away, including the gym and pool. “I brought him a cigar cutter, a lighter and an ashtray, I made him espresso and he’s lounging on the veranda,” it cited a housekeeper as writing to Packer’s staff. In 2015, Packer accompanied Netanyahu to Washington DC when the prime minister spoke to the US Congress. Packer was also present when Netanyahu addressed the United Nations. But the relationship with Packer was exploited by Netanyahu, according to testimony from Ari Harow, the politician’s bureau chief at the time. “I thought he came to some of the meetings with Bibi drunk or high,” Harow testified, using the leader’s nickname, according to Haaretz. “One time when he came for a meeting he threw up – I don’t remember whether it was before or after.” He added: “It was clear that the relationship from his [Netanyahu’s] point of view was in order to benefit from this friendship,’” Harow testified, according to Haaretz. Netanyahu, when testifying to police, has acknowledged Packer considered him “the most impressive person he met” and said they had a “deep bond”. But he said he did not notice what investigators described as “anything unstable in his mental state”. The Haaretz article alleged Netanyahu’s key ambition for Packer was to get him to buy an Israeli newspaper, Yedioth Ahronoth, in an attempt to lessen its critical coverage. Harow testified that the prime minister “absolutely briefed” Packer at the official Jerusalem residence on how to buy the paper, with Sara Netanyahu talking about how the news outlet “is always attacking her and the children”. But Packer’s attempts failed and he was devastated, Haaretz cited Packer’s personal assistant Hadas Klein as testifying. “He returned from there crying,” she was alleged to have said. “He said to me, ‘Hadas, I can’t do it.’ In the morning we took him to the airport and he threw up violently from the pressure. I told him, ‘Do only what you believe in.’ He cried. He really cried, with tears.” Later, in 2016, Packer’s personal life hit a low, according to Damon Kitney, the author of The Price of Fortune, which was written using interviews with Packer, who has bipolar disorder. He was drinking a bottle of vodka “and more” a day and was also on powerful psychiatric drugs. Packer returned to Israel to recover in February 2016, Haaretz reported. Later that year, Milchan suggested Netanyahu call Packer’s psychiatrist directly, Haaretz claimed. Milchan stated in his testimony, according to Haaretz, that Packer’s close relationship with the prime minister and Cohen, who was by then the Mossad head, warranted a check on his “mental and medical condition”. “I would check because of two concerns: as a friend and as a national risk,” Milchan was quoted as saying. Haaretz reported Netanyahu shared the concern and did call the psychiatrist, although it said no information was divulged and the prime minister has not confirmed this. Packer left Israel later that year and has not returned. The Guardian has contacted the Israeli prime minister’s office for comment on the Haaretz report. Separately, Packer’s gambling empire, Crown Resorts, is under scrutiny by two inquiries in Australia after a finding by another inquiry in New South Wales in February that it was not fit to hold the licence for a new casino in Sydney. The NSW inquiry found that Crown facilitated money laundering at its existing casinos in Melbourne and Perth and that junket operators who brought in high-rollers were linked to organised crime.